a) The external environment of the global automobile industry is quite complex. Regulations vary from country to country and in the United States even from one state to another. Firms must be prepared to anticipate and respond to these external forces. It appears VW’s response to the design issue, in this case, was neither ethical nor legal. Why do you think VW made the decisions it did regarding this emissions problem in the late 2000s? What could VW have done differently?

b) In January 2017, a U.S. grand jury indicted six current and former VW executives for their alleged role in the emissions scandal and its subsequent cover-up. The U.S. Justice Department decided to bring charges against these executives after a 16-month criminal investigation by the FBI. In the past, it has been rare for executives to be personally indicted for company misconduct. Do you agree with the decision to go after individual managers in this case? Why or why not?

c) What are the competitive implications of the actions of VW? Does this situation impact the industry rivalry that is discussed in the five forces model, for instance?